Buying with plastic not good for impulse control, or obesity

This column has issued past warnings: How you pay can affect how much you buy.

Now, new research suggests that how we pay even impacts our waistline -- at least for some of us.

Is it coincidence that the nation's obesity rate has increased nearly 50 percent since 1988 while the share of cash in our wallets has fallen by one-third (at least it did between 1974 and 2000)?

Fat chance, says Manoj Thomas, assistant professor of marketing at Cornell University. He and colleagues from the State University of New York believe the convenience of paying by plastic also leads to more impulsive behavior. They set out to answer the question: Do consumers buy more junk food when they pay with plastic than with cash?

"Plastic modes of payment obviously have a lot of advantages," Thomas says. "But people should be aware there are some side effects."

As in, perhaps, bigger sides.

First, Thomas and colleagues examined the actual purchases of 1,000 single shoppers at one particular grocery chain. Those paying with credit or debit cards (half of all purchases) had less healthy groceries in their carts -- more ice cream, candies, potato chips and pudding.

In later studies, researchers showed people pictures on a computer of 20 "vice" and "virtuous" products and told them beforehand whether the store accepted "all major credit cards" or just cash. Students in a lab who used a card to pay spent an average of $14 on unhealthy products. Those paying with cash spent $10 on vices. In an online poll of consumers, the difference was more pronounced -- $14 vs. $8

Why the difference? Past studies have found that we experience more trouble parting with cash. Thomas found the same thing: Consumers who used cash reported greater feelings of pain and used more negative words to describe their feelings afterwards.

Did price somehow play a role? Nope. After shopping, people came within $2 of guessing how much they actually spent, regardless of whether they used cards or cash.

That led Thomas to conclude that even when consumers pay careful attention to prices, credit cards reduce pain of payment and, in turn, weaken impulse control.

Perhaps you remember a column I wrote two years ago about Spendthrifts and Tightwads. Spendthrifts experience little pain when they buy things. Tightwads find spending money to be quite difficult. They are more inclined to regret a purchase afterward.

Thomas tried to determine whether tightwads were more swayed by cash than spendthrifts. He rated each participant on a spendthrift-tightwad scale, much as It's Only Money's readers did two years ago. He found tightwads spent much more on impulsive items when they paid by card ($12.80) than when they paid with cash ($5.60). The manner of payment didn't sway the spendthrifts or unconflicteds.

Obviously, if you're a tightwad, cash is your friend.

Interestingly, consumers shelled out the same amounts of virtuous items -- beans, rice, baby food and veggies -- whether they used cash or plastic. This make sense, Thomas says, because deciding to buy healthy items likely involves more deliberation.

What's more, Thomas found that shoppers buying larger baskets of groceries were more susceptible to impulse buys. And consumers shopping on weekends were less impulsive in their purchases, possibly because they were more likely to use shopping lists and stick to them.

Also, researchers found debit and credit cards both prompted impulsive buys even though debit cards and cash are basically the same -- both draw down your account balance almost immediately. Yet spending becomes more abstract, so we don't feel as strongly about it, Thomas says.

There are a couple larger things to take away from this.

"The first is that environmental factors around us that seem innocent can influence the way we spend," Thomas said.

"Secondly, all purchase decisions are not the same. When you're standing in front of a piece of cheesecake, you feel like consuming it." Such emotion-driven purchases are more likely influenced by environmental factors, he said.

So tightwads, beware. "There are people who suffer from their consumption purchases,' Thomas said. "They end up feeling bad. They find it difficult to control their impulses. If you are one of those, (cash) is another tool to help you improve your self control."

The rest of us, I conclude, either have little to worry about, or no hope at all.